The war of DEGENERATION
The titan battle to stop the destruction of life on the planet.
As we see the destruction of war and terror rage in Israel and Palestine, another, less visible, war has been raging in the world for the past couple of decades.
While I work on co-creating investible models for producing food and fibre in a way that REgenerates and supports life, the existing, DEgenerative and destructive, agri-chemical input reliant model is fighting back. The incumbent system is fighting to extend their licence to kill and it is spending billions to ensure that happens. Like any war, the way forward is peace - and it comes from a realisation that destroying soils, biological life, water and ocean to produce food is also destroying humanity's lifesupport system. Simply put. It's not OK.
Alternative models exist and is continuously being developed, once implemented it delivers far more profits with the farmer/landowner level. Its overdue.
Currently, most of the climate RISK is carried at farm level yet only about 5-10% of the value created from the production is retained here. Meanwhile, taxpayers in the western economies subsidise farmers to keep them in business. E.g. the EU CAP system takes up 31% of the total EU budget or €55.710M. This does not factor in the externalities e.g. environmental and societal cost which the existing agricultural system is causing. All this while the big input, genetics and commodity players keep most of the value created, here are the profits for 2022:
Cargill USD163.000M / Bayer €4.300M / Yara USD6.700M / Archer Daniels USD 7.570M / Wilmar Int'l USD 2,400M / Bunge 4.250M.
Most had record profit growth of more than 20% from 2021 to 2022 all in the shadow of food producers, manufacturers, brands and consumers experiencing record food inflation of about... well, 20%.
With climate change the existing model will experience massive disruption as climate becomes increasingly unpredictable and extreme, now in real time. CPG companies that provide most of our processed products know this and is engaging with the supply chain to help save their core business and increasingly, farmers are realising that creating soil (the core asset) resilience is key to survival. There is a desperate need for knowledge about how to farm differently and to de-risk the transition for farmers, both in terms of affordable finance, capacity building and psychological safety.
For this to happen, our politicians needs to stop listing to the incumbents and do what is right to safeguard prosperity for people and planet.
1) Stop subsidising the intensive chemical system, phase it out NOW! Just STOP.
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2) Seek compensation from the big players to pay for the regenerative transition a windfall tax or levy to cover the real social and environmental costs of the chemical fertilisers, herbicides and pesticides.
2) Help farmers and the industry transition, begin by ensuring that all agricultural colleges and schools teaches organic, regenerative, life-building farming.
3) Ensure that the polluter pays. Gradually, levy a Co2/Biodiversity/Water pollution and degradation tax - make sure to include scope 3 to ensure the entire value chain is included.
4) Remove VAT and other taxes or subsidise products produced in an organic, regenerative way. Increase taxes on products that do not. While at it tax products that cause bad health including processed food processed and artificial, lab produced ingredients. This will sway the consumer space, provide value chain incentives and save billions in health costs annually.
Most of above is not new, it has been included in the EU green deal's FARM TO FORK STRATEGY, however, now that the national implementation is taking place, war is breaking out - with politicians being persuaded to water down ambition and timelines. These forces are making changes to the political system to further delay change. From the toppling of Venstre, Danmarks Liberale Parti chairman and Danish vice-PM Jakob Ellemann-Jensen to a former Shell executive Vopke Hoekstra now the EU Commisioner for Climate.
Most people will call above a radical suggestion, however, our current system can barely get more extreme and radical in its design.
Time to put down the weapons and begin to communicate, make the RIGHT and BOLD decisions. Our future on the planet depends on it.
Not sure who is reading this, but if you are from a BigAg company, reach out - would love to repurpose your model to support life, not death.